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External Factors That Can Affect Your Business
by Startacus Admin
While most business owners will spend their time concentrating on factors that they do hold direct control over, such as corporate strategy and employee recruitment, they seldom consider the external factors that can affect a business. While you may not be able to prevent these kinds of circumstances, you can take precautions that will ensure you’re better suited to dealing with them in the event they do occur.
Laws and Regulations
Government legislation and industry regulations are the kind of external forces that business owners will be most familiar with. For example, many businesses are only able to operate because of the ability to import cheap goods from emerging markets like China. If the government decided to impose an additional tax on these products as a measure to benefit local manufacturers, many business owners would have to rethink large parts of their supply chain strategy. Staying up-to-date on this subject by closely following industry news is the best way to prepare in advance.
There’s no business in the world that doesn't face any kind of external competition. Even companies operating in niche industries will have to compete with similar product-makers or service providers. All of you have to compete for the customer’s money as, in many cases, most shoppers are only interested in owning one kind of a similar product. Lots of people will tell you that you needn’t worry about the competition and that you should instead simply focus on making your own products as good as it can be. The reality is that there has to be a balance between this and keeping up to date with what others are doing, though, as you don’t miss out on any technological advancements or other potential advantage.
Finally, dealing with natural disasters, like floods, landslides, or lightning, is an area that many business owners neglect. Fortunately, the UK is one of the least affected parts of the world when it comes to such events. This means that it's easy for people to take for granted the fact that such an event could never happen to you. As this report by Touch Financial shows, when they do occur they can cost business owners millions. Many insurance providers include additional cover for these kinds of incidents. This can include compensation if your earnings potential is reduced as well as a pay-out for any major structural damage that needs to be rebuilt.